CHRISTINE ROMANS, CNN ANCHOR: The release of three Americans being held by North Korea is imminent. When could it happen and how does it tie into nuclear talks? We're live in Seoul.

Welcome back to EARLY START. I'm Christine Romans.

BRIGGS: I'm Dave Briggs. Thirty minutes past the hour. So much to discuss.

We'll start, though, with the bombing -- bombshell admission from the Trump legal team. It's Rudy Giuliani, who recently joined the president's legal staff, telling Fox News last night Mr. Trump did pay back his personal attorney Michael Cohen that $130,000 in hush money Cohen paid adult film actress Stormy Daniels just 11 days before the election.

ROMANS: That directly contradicts something the president himself recently claimed. Giuliani defended the Cohen payment as legal and went further.

Political correspondent Sara Murray has more from Washington.

(BEGIN VIDEOTAPE)

SARA MURRAY, CNN POLITICAL CORRESPONDENT: Good morning, Dave and Christine.

Rudy Giuliani may be a new addition to President Trump's outside legal team but he is certainly entering with a splash. He was on Fox News last night and on there, he divulged the news that apparently President Donald Trump reimbursed his longtime personal attorney Michael Cohen for that $130,000 payment in hush money to silence adult film star Stormy Daniels.

GIULIANI: That money was not campaign money -- sorry. I'm giving you a fact now that you don't know. It's not campaign money. No campaign finance violation.

SEAN HANNITY, HOST, FOX NEWS "THE SEAN HANNITY SHOW": So they funneled it through a law firm?

GIULIANI: Funneled through a law firm and the president repaid it.

HANNITY: Oh, I didn't know that he did.

GIULIANI: Yes.

HANNITY: There's no campaign finance law?

GIULIANI: Zero. I knew how much money Donald Trump put into that campaign. I said, $130,000? He can do a couple of checks for $130,000.

When I heard Cohen's retainer of $35,000 when he was doing no work for the president, I said that's how he's repaying -- that's how he's repaying it, with a little profit and a little margin for paying taxes to Michael.

HANNITY: The president -- but did you know the president didn't know about this?

GIULIANI: Uh --

HANNITY: I believe that's what Michael said.

GIULIANI: He didn't know about the specifics of it as far as I know, but he did know about the general arrangement that Michael would take care of things like this like I take care of things like this for my clients. I don't burden them with every single thing that comes along.

MURRAY: Now, of course, that revelation is counter to what both Michael Cohen and the president have said publicly.

Cohen said he was never reimbursed for this and that he did this as a private transaction on the president's behalf, but not necessarily with the president's knowledge.

As for President Trump, he has denied that he was involved in the payment or that he knew where the money came from.

UNIDENTIFIED FEMALE: Did you know about the $130,000 payment to Stormy Daniels?

DONALD TRUMP, PRESIDENT OF THE UNITED STATES: No, no. What else?

UNIDENTIFIED FEMALE: Then why did Michael -- why did Michael Cohen make this if there was no truth to her allegations?

TRUMP: Well, you'll have to ask Michael Cohen. Michael is my attorney and you'll have to ask Michael.

MURRAY: Now we have the president's attorney, on television, saying something entirely different.

Back to you guys.

(END VIDEOTAPE)

BRIGGS: All right, Sara, thanks.

"The Washington Post" reports Giuliani spoke with the president after the Fox News interview and the president was quote "very pleased." Giuliani told the "Post" he and the president discussed his revelation about the reimbursement in advance.

That's not easing concerns in the White House. One presidential adviser telling the "Post" quote, "Trumpworld will see this as a total unforced error and further affirmation that hiring Rudy was not the best idea."

ROMANS: But, Giuliani says his remarks were approved by the president and that he does not expect to be fired.

Stormy Daniels lawyer, Michael Avenatti, responding this way.

(BEGIN VIDEO CLIP)

MICHAEL AVENATTI, ATTORNEY FOR PORN STAR STORMY DANIELS: I don't care if you're on the left, I don't care if you're on the far right, I don't care where you line up, you should be disgusted by what has happened in connection with the lies that you have been told over the last three months about this payment.

There's no way to dress this up. You can try to put lipstick on the pig morning, noon, and night and it's still going to be a pig, Don. This is -- this is disgusting what we're hearing.

Look, Rudy Giuliani claims that this is something that was discussed in advanced and that the president is on board with it. It seemed to catch even Sean Hannity by surprise and confused him based on what has been said on the public record.

[05:35:08] It's really hard to say whether this is some sort of intentional planned gambit or an accident. But, I think we're going to have to see how it plays out -- if there's sort of instant walk back. And even within that interview it sort of felt like there was already a little bit of wiggle room introduced by the notion that what he was actually referring to was just the retainer.

I think we'll see pretty clearly in a few days whether this is something they double down on or quickly try to brush under the rug and that will give our answer.

BRIGGS: Yes, a lot of questions.

When did the president make these payments, when did they start, when did they stop? Why does a billionaire have to set up a payment schedule, if you will? And why did the total go to $460,000 -- not really the $130,000? Rudy says it's various expenses.

ROMANS: Yes.

BRIGGS: A lot of questions remain.

ROMANS: Let's listen to a little bit of what Rudy explains about this. And he talks about the $130,000 payment and he talks about storm troopers coming into Michael Cohen's office -- listen.

(BEGIN VIDEO CLIP)

GIULIANI: I was talking about the $130,000 payment --

HANNITY: Right.

GIULIANI: -- the settlement payment, which is a very regular thing for lawyers to do.

The question there was the only possible violation there would be was it a campaign finance violation, which usually results in a fine, by the way. Not this big storm troopers coming in and breaking down his apartment and breaking down his office.

That was money that was paid by his lawyer, the way I would do, out of his law firm funds or whatever funds -- it doesn't matter -- and the president reimbursed that over a period of several months.

(END VIDEO CLIP)

ROMANS: Reimbursed that over a period of months. Also, his characterization of the big storm troopers coming in and breaking down the apartment and breaking down the office. Michael Cohen, himself, said that the -- that the FBI agents were very nice and he answered the door and they walked in and I don't think there was much breaking down.

But the language is very colorful and really, I think, hits at exactly what he's trying to do here, which is to rile up the base.

KOPAN: Yes, that's right, Christine.

And keep in mind, from what we understand, the referral to the New York district attorney who actually conducted the investigation into Michael Cohen goes far beyond, potentially, this payment. There's a lot of discussion of potential tax issues -- other things that might have come up when the investigation began. So to portray it as just this one payment issue that is now cleaned up is not genuine in this case.

It's a bit of a spectacle and to a certain extent it really seems like Rudy Giuliani was probably brought in to the Trump legal team, in part, to do P.R., to go on T.V., to be an attack dog, and that's really one of the things he's quite good at. He does have legitimate legal experience and is a former prosecutor.

But at the same time, he is one of the talking heads that Trump just loves to watch on television, which we understand to be something he does quite often, is watch his deputies go out there and serve that function. So I think, to a certain extent, that's partly what we're seeing.

Again, to the conversation we were just having, it's unclear if there is a coherent message strategy that is going along with this effort.

BRIGGS: It should be an interesting executive time period this morning watching the Twitter account of the president.

But this is ultimately a legal question because the politics don't really matter. The 40 or so percent that support the president don't care about this.

And the far left, they're not using it. They're not running it in political ads. They've found that they don't care either.

But speaking of legal, a major shakeup to the president's legal team as Ty Cobb is out and in is Emmet Flood, a powerhouse attorney -- really influential guy. Worked as part of the Clinton impeachment team.

But most feel this is about a real change in strategy. How might it change as we move forward?

KOPAN: Yes. Well, it certainly feels like this, potentially, is a new phase of the investigation.

Keep in mind there's a lot more attention these days on whether or not Mueller will get his interview with Donald Trump. But the more we hear about that investigation and what they're doing with witnesses it seems that Mueller is really starting to zero in on some things and he's certainly already indicted some folks. We don't know what the next shoe to drop is.

But as I mentioned, Rudy was sort of brought in and he's a new public face of the president's legal team and certainly, I imagine, will continue to go out there and serve in that function.

But there are also some folks who were brought in -- Emmet Flood, the Raskins, who are sort of more a serious variety of lawyer who potentially could bring in some firepower behind the scenes to actually sort through the complex legal decisions that this team might actually have to be making in the next few weeks or months.

ROMANS: All right, Tal Kopan. An awful lot of material to go over from last night from that Hannity interview. Thank you so much for that Tal, in Washington.

[05:40:00] BRIGGS: Yes, we could do it all morning. OK.

But breaking news this morning. The release of three American hostages held by North Korea is imminent.

Last night, the president posted this cryptic tweet. Quote, "As everybody is aware, the past administration has long been asking for three hostages to be released from a North Korean labor camp, but to no avail. Stay tuned."

Now, an official is confirming movement on that front.

CNN's Alexandra Field joins us live from Seoul, South Korea with the latest. Good morning, Alex.

ALEXANDRA FIELD, CNN INTERNATIONAL CORRESPONDENT: Good morning, Dave, and let's start with that tweet. Certainly, the president telling the world to stay tuned, indicating that there could be imminent developments here.

To fact-check that tweet a little bit, we're talking about three men who remain detained in North Korea. One of them was taken into custody during the Obama administration. The other two, however, were taken into custody after President Trump was in office.

All three, of course, still being held hostage by North Korea but certainly, it would seem that this would be an opportune time for their release. That has been widely speculated on by analysts who say this is an opportunity for North Korea to show some good faith before this unprecedented sit-down between Kim Jong Un and President Trump.

One source speaking to CNN goes farther than the teaser issued by the president to stay tuned, saying that, in fact, a release is imminent and that groundwork for this was laid some two months ago when North Korean's foreign minister traveled to Sweden and proposed the idea. But he was told that U.S. officials, at the time, would insist that the release of these men was in no way tied to the broader issue of denuclearization.

The son of one of those detainees says that he has been given no indication yet of any imminent release but certainly, these families have every reason to be hopeful right now -- Dave, Christine.

BRIGGS: All right. Alexandra Field live for us in Seoul -- 6:40 p.m. there. Thanks.

ROMANS: All right.

Police in Las Vegas releasing dramatic bodycam video from the night of that massacre that killed 58 people.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Breach, breach, breach.

(Gunshot)

(END VIDEO CLIP)

ROMANS: We have more of what police said, heard, and saw as they approached Stephen Paddock's room at the Mandalay Bay.

(COMMERCIAL BREAK)

[05:46:41] ROMANS: Liberal economist Paul Krugman says the new tax plan is not the investment miracle the GOP promised.

(BEGIN VIDEO CLIP)

PAUL KRUGMAN, ECONOMIST, DISTINGUISHED PROFESSOR OF ECONOMICS, GRADUATE CENTER OF THE CITY UNIVERSITY, NEW YORK, COLUMNIST, "THE NEW YORK TIMES": The theory of the case behind this tax cut was that it was going to lead to a huge surge of corporate investment -- real investment, actually -- plants and equipment -- that was going to eventually push up wages, and we're just not seeing that.

I mean, so there's enough -- there's enough data already under -- you know, under the bridge for us to say that this is not playing out according to the story. This doesn't look at all like the story. This looks like the tax cut is a nothing burger as far as business investment is concerned.

(END VIDEO CLIP)

ROMANS: The tax bill slashed the corporate rate from 35 percent all the way down to 21 percent. Republicans said that would super-charge investment and create jobs.

But to a much greater degree companies are paying Wall Street. Here are the numbers.

Worker bonuses and wage increases, there were many of them. Hundreds of companies announced wage increases. Altogether, that totaled $6.7 billion, while companies have lavished investors with $375 billion by buying back their own stock.

The latest example here is Apple. The tax bill made it cheaper to bring home $285 billion in foreign cash. Apple plans to reward investors with a record $100 billion.

Now, Apple gave its workers $2,500 bonuses. That makes a total of $300 million. That means it spent 333 times more on buybacks than on bonuses.

Now it might be just too soon to see exactly how the tax cuts will filter through the economy. The economy is already strong. The jobless rate is near a 17-year low, wages are picking up. Stocks are still up about 30 percent since the election.

And as former Health and Human Services Sec. Tom Price said, health care costs are rising, echoing what the CBO found last fall. Obamacare premiums will jump about 10 percent each year, leaving millions more uninsured because of the repeal of the Obamacare individual mandate.

The U.S. is considering restricting Chinese telecom companies like Huawei and ZTE from selling in the U.S. Just as team Trump arrives in Beijing for trade talks, trade concerns sent Wall Street lower.

As to the Federal Reserve, the Central Bank did not raise interest rates this month but hinted that more rate hikes are on the way, Dave.

BRIGGS: All right, thank you, my friend.

Time to look at what's coming up on "NEW DAY" with Alisyn Camerota joining us.

Alisyn, so much talk about what Rudy Giuliani said about this $130,000 payment, but what's not getting a lot of notice is how he laid down the red line for investigators. They can't go after Ivanka, that the whole country would turn against them. And he added, Alisyn, men are disposable.

How do you feel about that if you're Jared Kushner?

ALISYN CAMEROTA, CNN ANCHOR: How do you feel about that if you're men? I --

BRIGGS: Not good. CAMEROTA: I mean -- OK, good. I'm glad I have a first-person source.

Listen, I think we all appreciate Rudy's paternalistic protection but little ladies can be investigated also.

[05:50:02] I was a former crime reporter. Sometimes women commit crimes. I know this will come as a news bulletin to Rudy Giuliani.

So look, if there is something wrong, obviously Robert Mueller's team would investigate all of the people, whether they're women or not, whether they're related to the president or not.

But we're getting ahead of ourselves. I mean, as you point out Dave, there were so many bombshells in what Rudy -- I should never have gone to sleep last night --

ROMANS: Yes.

CAMEROTA: -- because Rudy Giuliani --

BRIGGS: No, I know.

CAMEROTA: -- came out with so many bombshells.

So we have Stormy Daniels' attorney, Michael Avenatti, on.

He also can't sleep because just when he thinks that maybe the tide is turning or if the investigation is going in a different direction, then the administration seems to hand him some sort of gift. And so his head was exploding last night when it turned out that Rudy Giuliani confirmed that the president did pay Michael Cohen back the $130,000 and what does that mean for campaign finance law.

ROMANS: Rudy Giuliani does not cut Hillary Clinton the same slack as he does Ivanka Trump, which is -- I find very interesting.

BRIGGS: Apparently she's not a fine woman, like Ivanka.

ROMANS: A fine woman.

BRIGGS: Thankful you also have Jeffrey Toobin because we need some legal explanations about all of this. A lot of questions --

CAMEROTA: Oh, yes.

BRIGGS: -- including when these payments were made.

Alisyn --

CAMEROTA: We have Jerry Cordero, we have Laura Coates and Jeffrey Toobin. We have a lot of great legal minds who are going to dive into all of this, guys.

ROMANS: All right.

BRIGGS: Terrific. ROMANS: Thanks so much. Nice to see you.

CAMEROTA: You, too.

BRIGGS: All right.

Another safety scare for Southwest Airlines. A flight forced to divert after a window cracked. More on that, next.

(COMMERCIAL BREAK)

[05:56:08] ROMANS: Police releasing nearly three hours of body camera footage from the Las Vegas massacre. Watch as two officers enter the killer's hotel suite immediately following the mass shooting.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Breach, breach, breach.

(Gunshot)

UNIDENTIFIED MALE: With you, with you.

OK, we've got one suspect down -- 419 and five. Just keep it clear.

(END VIDEO CLIP)

ROMANS: The footage shows police and security guards rushing through the lobby and casino floor, discussing tactics to find the gunman, Stephen Paddock, and stop him.

Paddock killed 58 people and injured hundreds more when he opened fire from the 32nd floor of the Mandalay Bay. His motive, seven months later, remains unknown.

BRIGGS: No word yet on what caused the deadly crash of an aging National Guard cargo plane on a Georgia highway. All nine crew members aboard the aircraft were killed. Video from a nearby business shows the horrifying final seconds of the flight.

The Puerto Rico Air National Guard WC-130 normally used for weather reconnaissance was being flown from Savannah, Georgia to Tucson, Arizona to be decommissioned.

Puerto Rico's governor and President Trump sending condolences to the families of the victims.

BRIGGS: Two African-American men arrested at a Philadelphia Starbucks last month have reached a financial settlement with the coffee chain and the city.

Now, details of the settlement between Donte Robinson and Rashon Nelson and Starbucks, that is confidential.

But their settlement with the city is public and it's remarkable -- one dollar each. Each man will take one dollar and they will work with the Philadelphia officials and a nonprofit on a $200,000 grant to encourage young entrepreneurs. So the city will kick in $200,000.

Video of Robinson and Nelson getting arrested went viral after they occupied a table without making a purchase. The manager called police. Robinson and Nelson were just waiting for a friend who showed up later as they were led away in cuffs.

BRIGGS: Another midair scare for passengers on Southwest Airlines. A cracked window forcing Southwest flight 957 en route from Chicago to Newark to make an unplanned landing in Cleveland Wednesday.

Airline officials say there was a crack on the outer pane of the multi-pane window. The cause is still unknown.

It comes just a couple of weeks, though, after you remember, the passenger died on a Southwest flight when an engine exploded and she was partially sucked out of the plane through a broken window. The plane made an emergency landing in Philadelphia.

ROMANS: A rebranding campaign for the Boy Scouts of America. Starting in February, the organization's program for youth aged 11 to 17 will be known as Scouts BSA. The decision coming less than a year after the Scouts decided to invite girls to join.

The overall organization name will remain Boys Scouts of America. There's a new slogan coming, too -- "Scout Me In."

The group says more than 3,000 girls have joined the early adapter program and are participating in Cub Scouts right now.

BRIGGS: I wonder how that impacts Girl Scouts and I wonder if they're coming --

ROMANS: I don't think there are any changes for Girl Scouts.

BRIGGS: No changes. I wonder if they're --

ROMANS: I was surprised that there are three --

BRIGGS: -- dropping numbers --

ROMANS: Oh.

BRIGGS: -- because they're going to Scouts.

ROMANS: I'll have to check that -- I'll have to check that out.

BRIGGS: All right. Thanks for joining us, everybody. I'm Dave Briggs.

ROMANS: And I'm Christine Romans. "NEW DAY" starts right now.

ANNOUNCER: This is CNN breaking news.

CAMEROTA: We want to welcome our viewers in the United States and around the world. This is NEW DAY. It is Thursday, May third, 6:00 in New York.

And we do begin with breaking news. A stunning revelation from one of the president's lawyers. Rudy Giuliani says President Trump reimbursed Michael Cohen for that $130,000 of hush money paid to porn star Stormy Daniels.

You'll remember that was to keep her from going public about her alleged affair with Mr. Trump days before the 2016 election.

CHRIS CUOMO, CNN ANCHOR: All right. Now, we don't know what this is going to mean legally but factually, it contradicts denials from President Trump and the White House who repeatedly said the president had and has no knowledge of the payment, OK?

Giuliani insists the reimbursement does not violate any campaign finance laws. And this comes as Giuliani discusses the conditions for a potential interview between the president and special counsel Robert Mueller.